The report said that Las Vegas retail rents are currently at a five-year high and concessions are tapering off.

Why?

Vacancy rates are at a five-year low, the report said.

Based on the retail inventory at the beginning of the year, 2005 demand is expected to exceed new supply for the second consecutive year, pushing the vacancy rate down by 60 basis points to 8.1 percent.

The hottest local submarket is in the northwest part of the Las Vegas Valley, the report said. In that market, the vacancy rate was below 3 percent early this year. The report cited strong demographics in that market -- roughly in the area of Summerlin -- and the southwest part of the valley.

"Investors will be attracted to the northwest and southwest submarkets, where strong demographics will support consistent improvement in property performance," the report said.

Marcus & Millichap researchers predict asking rents to climb 1.8 percent to $20.40 per square foot by the end of the year with effective rents climbing 2.1 percent to $18.43 per square foot.

As has become typical with booming real estate projections on the Las Vegas market, the researchers pointed to the long-running local economic hot streak.

"The Las Vegas economy continued to grow," the report said. "Employers are expected to add more than 33,000 workers to payrolls, a 4 percent increase."

That growing economy is expected to generate a 4.9 percent gain in retail sales by year's end, bolstered by an additional 4.2 percent population growth.

Despite the population increase, only 1.5 million square feet of new retail space is expected to be completed in 2005, down 48 percent from 2004.

Marcus & Millichap expressed concern over the landlocked nature of the Las Vegas Valley -- based on the federal ownership of virtually all of the surrounding land. Still the report pointed to 12 million square feet of new projects "in the construction pipeline."

"Nearly all of the projects in the planning phase, though, do not have start dates, and a substantial portion may never proceed to groundbreaking," the report said. "Nonetheless, approximately half of the square footage is devoted to mixed-use developments with unspecified retail components. Additionally, 1.3 million square feet of community centers are planned in metro areas, including 680,000 square feet in Henderson."

Golf course crowd

When William Lyon Homes began selling homes at Mountain Falls, they had a ready-made audience from the existing golf club that serves as the centerpiece of the master-planned community.

The first nine holes of Mountain Falls Golf Club opened three years ago, the second nine opened a year later, said Neil Pierce, the golf course's general manager and director of golf.

"It was by design that the golf course was up and running first," he said.

The same thing that is attracting buyers to the homes has been drawing golfers to the tune of 25,000 to 30,000 rounds a year -- affordable prices. Pierce said high gas prices haven't dented traffic much, either. Just like home buyers, the golfers are saving enough money on a round of golf to justify the extra gas costs, he said.

Both golfers and house hunters venturing across the mountain are finding something increasingly difficult to find in the Las Vegas Valley -- peace.

"It's kind of nice to get out of town," Pierce said. "It's quiet. There's no planes. You could hear a pin drop out on the greens."

For Mary Connelly, Nevada Region president for William Lyon Homes, said having the golf course in first also means that the first residents will not be stuck waiting for their their promised green space to green up.

"I think it's an important component," she said. "So many times when you are pioneering, the people have to wait a few years before the major amenities are there. ... This way, with the golf course there, it's a great marketing window."

Kevin Rademacher is a reporter for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4069 or by e-mail at kevinr@lasvegassun.com.